SAVE - Airline bookings are strong in latest data read from Bank of America
2023-08-08 06:35:47 ET
Airline stocks have been in a slump over the last few weeks, including double-digit drops for Sun Country Airlines ( SNCY ) and JetBlue Airways ( JBLU ). Investor concerns in the sector include the trend of airlines guiding for lower fares in Q3 and the recent rally in energy prices. However, there appears to be some resilient demand for airline bookings based on the weekly sector update from Bank of America. The firm said it has been surprised to see a solid trend since mid-July.
"Specifically, system net sales rose +9.8% YoY for the week ending 7/30 compared to +8.4% last week and the +1.2% trend seen at the end of June. Volumes grew +9.4% YoY compared to +5.7% at the end of June while pricing was also a bit better. This trend coincides with accelerating airlines spending according to BAC aggregated credit and debit card data."
On a trailing four-week basis, domestic airline ticket sales have accelerated nearly eight percentage points compared to international sales at up four percentage points. Per BofA's data, the rate of growth in the latest week still favors the international business, with domestic sales up +5.3% year-over-year and global sales up +13.9%. Of note, large corporate booking volume was positive for the third consecutive week after nearly three months of negative weekly year-over-year growth.
Airline fares in the U.S. fell 18.9% in June compared to a year ago on an unadjusted basis. Overall, core inflation cooled to a 4.8% year-over-year pace during the month. On a month-to-month comparison, air fares fell 8.1% in June after declining 3.0% in May, retreating 2.6% in April, and dropping 6.5% in March, according to data compiled by the Bureau of Transportation Statistics. The next CPI report is due out on August 10.
Airline stocks: American Airlines ( AAL ), Delta Airlines ( DAL ), Southwest Airlines ( LUV ), United Airlines ( UAL ), JetBlue ( JBLU ), Hawaiian Holdings ( HA ), Alaska Air Group ( ALK ), Allegiant Travel ( ALGT ), Spirit Airlines ( SAVE ), Mesa Airlines ( MESA ), SkyWest ( SKYW ), Sun Country Airlines ( SNCY ), Frontier Group ( ULCC ).
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Airline bookings are strong in latest data read from Bank of America